Lawyers generally ask for retainer money before they start working on their clients’ cases. The retainer money, by law, is placed into a trust account and can only be withdrawn upon the delivery of the accounts.
Occasionally, I encounter clients half-jokingly saying, “Look at the interests you make off my deposits!” Alas, it isn’t so.
Under the Law Society Act, when opening a trust account, the lawyer must direct the financial institution (usually a bank, but it can be a credit union or a provincial saving office) that all interests earned on the trust account be paid to the Law Foundation of Ontario.+ (75% of the Law Foundation’s revenue funds Legal Aid Ontario.)
Lawyers are required to file an annual report on the interests earned from the trust account and certify that the interest has been paid to the Law Foundation.
Beyond the traditional retainer-trust money, lawyers are sometimes asked to hold various properties in trust in client-specific trust accounts, or safety-deposit boxes. The properties being held may include trust funds, stocks, shares, jewellriy, art, or real estates. Any appreciation in value of the property accrued in this case belongs to the client, not the lawyer.
Next time you’re asked to pay retainer money in trust, perhaps you can find solace in knowing that you’re making a contribution to the Law Foundation and Legal Aid Ontario.
+For more information about the Law Foundation, please visit their website: www.lawfoundation.on.ca
